More beef packer consolidation predicted

More beef packer consolidation predicted

Kevin Grier, a senior market analyst with the George Morris Centre is warning Saskatchewan and Alberta cattle producers that they might lose an important beef packing plant in the American Northwest. In a recently released paper, Grier argues that packers in the U.S. provide an effective floor price for Alberta. Western Canadian beef producers need these plants and the American plants need Canadian cattle. However, herds are dropping on both sides of the border and a large percentage of the feedlot capacity in Alberta and Saskatchewan is not being utilized. Grier believes that one of three U.S. plants is likely to be lost and he says the most likely casualty is the JBS plant in Hyrum, Utah. It’s about 700 miles south of Lethbridge. JBS recently scaled back production. Grier says the loss of a plant would likely make the U.S. Northwest self-sufficient in slaughter cattle. This, he says, would have serious ramifications for Canadian price discovery and overall basis levels. Grier says cattle feeders need to plan or at least make contingencies for a market without the U.S. Northwest as a backstop. I’m Kevin Hursh.

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